CAPITAL GROWTH FUND
(A Portfolio of Investment Series Funds, Inc.) Class A Shares
- --------------------------------------------------------------------------------
Supplement to Prospectus dated December 31, 1993
A. Please delete the Summary of Fund Expenses table on page 1 and insert
the following:
Summary of Fund Expenses-Class A Shares
-------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price).......................... 5.50%
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price).......................... None
Contingent Deferred Sales Charge (as a percentage of original
purchase price or redemption proceeds as applicable) (1)...... 0.00%
Redemption Fee (as a percentage of amount redeemed, if appli-
cable)........................................................ None
Exchange Fee.................................................. None
Annual Class A Shares Operating Expenses
(As a percentage of average net assets)
Management Fee (after waiver) (2)............................. 0.00%
12b-1 Fee (after waiver) (3).................................. 0.04%
Other Expenses (after expense reimbursement).................. 1.21%
Shareholder Services Fee (4)................................ 0.21%
Total Class A Shares Operating Expenses (5)............... 1.25%
</TABLE>
(1)Shareholders who purchase shares with the proceeds of a redemption of
shares of a mutual fund sold with a sales charge and not distributed
by Federated Securities Corp., prior to June 1, 1994, will be
charged a contingent deferred sales charge by the funds distributor
of .50 of 1% for redemptions made within one year of purchase. See
"Redemption Fee."
(2)The management fee has been reduced to reflect the voluntary waiver
of the management fee. The adviser can terminate this voluntary
waiver at any time at its sole discretion. The maximum management
fee is 0.55% of average daily net assets plus 4.50% of gross income,
excluding capital gains or losses.
(3)The maximum shareholder services fee is 0.25%.
(4)The maximum 12b-1 fee is 0.25%.
(5)The total Class A Shares operating expenses would have been 3.83%
absent the voluntary waiver of the management fee, a portion of the
12b-1 fee and the voluntary reimbursement of certain other operating
expenses.
The purpose of this table is to assist an investor in understanding
the various costs and expenses that a shareholder of Class A Shares of
the Fund will bear, either directly or indirectly. For more complete
descriptions of the various costs and expenses, see "Investing in Class
A Shares" and "Investment Series Funds, Inc. Information." Wire-
transferred redemptions of less than $5,000 may be subject to additional
fees.
<TABLE>
<CAPTION>
EXAMPLE 1 year 3 years 5 years 10 years
------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following expenses on a
$1,000
investment, assuming (1) 5% annual return
and
(2) redemption at the end of each time pe-
riod....................................... $72 $92 $120 $198
You would pay the following expenses on the
same
investment, assuming no redemption......... $67 $92 $120 $198
</TABLE>
The above example should not be considered a representation of past or
future expenses. Actual expenses may be greater or less than those
shown.
The information set forth in the foregoing table and example relates
only to Class A Shares of the Fund. The Fund also offers two additional
classes of shares called Investment Shares and Class C Shares.
Investment Shares, Class A Shares, and Class C Shares are all subject to
certain of the same expenses. However, Investment Shares are subject to
a maximum sales load of 5.75%, but are not subject to a redemption fee,
a shareholder servicing fee, or a 12b-1 fee. Class C Shares are not
subject to a sales load but are subject to a 12b-1 fee of 0.75%, a
shareholder servicing fee of .25%, and a contingent deferred sales
charge of 1.00%. See "Other Classes of Shares."
B. Please delete the table in the section entitled "What Shares Cost" on
page 17 and insert the following table in its place:
<TABLE>
<CAPTION>
Dealer Concession
Sales Load as Sales Load as a as a Percentage of
Amount of a Percentage of Percentage of Net Public Offering
Transaction Public Offering Price Amount Invested Price
----------- --------------------- ----------------- ------------------
<S> <C> <C> <C>
Less than $50,000 5.50% 5.82% 5.00%
$50,000 but less than
$100,000 4.50% 4.71% 4.00%
$100,000 but less than
$250,000 3.75% 3.90% 3.25%
$250,000 but less than
$500,000 2.50% 2.56% 2.25%
$500,000 but less than
$1,000,000 2.00% 2.04% 1.80%
$1,000,000 or greater 0.00% 0.00% 0.25%*
</TABLE>
*See sub-section entitled "Dealer Concession" below.
C. Please add the following information as the fourth paragraph of the
section entitled "What Shares Cost":
"No sales charge is imposed for Shares purchased through bank trust
departments or investment advisers registered under the Investment
Advisers Act of 1940, as amended, or retirement plans where the third
party administrator has entered into certain arrangements with Federated
Securities Corp. or its affiliates. However, investors who purchase
Shares through a trust department or investment adviser may be charged
an additional service fee by that institution."
D. Please delete the first three sentences of the sub-section entitled
"Dealer Concession" on page 17, revise the third sentence to read as
follows, and insert the following information:
"In addition to the dealer concession as noted in the table above, the
distributor may offer to pay dealers up to 100% of the sales load
retained by it. Such payments may take the form of cash or promotional
incentives, such as payment of certain expenses of qualified employees
and their spouses to attend informational meetings about the Fund or
other special events at recreational-type facilities, or of items of
material value. In some instances, these incentives will be made
available only to dealers whose employees have sold or may sell
significant amount of Shares. On purchases of $1 million or more, the
investor pays no sales charge; however, the distributor will make twelve
monthly payments to the dealer totaling 0.25% of the public offering
price over the first year following the purchase. Such payments are
based on the original purchase price of the Shares outstanding at each
month end.
The sales charge for Shares sold other than through registered
broker/dealers will be retained by Federated Securities Corp. Federated
Securities Corp. may pay fees to banks out of the sales charge in
exchange for sales and/or administrative services performed on behalf of
the bank's customers in connection with the initiation of customer
accounts and purchases of Shares."
E. Please add the following information to the first paragraph of the sub-
section entitled "Dealer Concession:"
"On purchases of $1 million or more, the investor pays no sales load;
however, the distributor will make twelve monthly payments to the dealer
totaling 0.25% of the public offering price over the first year
following the purchase. Such payments are based on the original purchase
price of Shares outstanding at each month end."
F. Please delete the first two paragraphs of the sub-section entitled
"Letter of Intent" on page 18 and insert the following:
"If a shareholder intends to purchase at least $50,000 of shares in the
funds in the Liberty Family of Funds over the next 13 months, the sales
load may be reduced by signing a letter of intent to that effect. This
letter of intent includes a provision for a sales load adjustment
depending on the amount actually purchased within the 13-month period
and a provision for the custodian to hold 5.5% of the total amount
intended to be purchased in escrow (in shares) until such purchase is
completed.
The 5.5% held in escrow will be applied to the shareholder's account at
the end of the 13-month period unless the amount specified in the letter
of intent is not purchased. In this event, an appropriate number of
escrowed shares may be redeemed in order to realize the difference in the
sales load."
G. Please delete the second sentence of the first paragraph in the sub-
section entitled "Concurrent Purchases" on page 19 and replace it with
the following:
"For example, if a shareholder concurrently invested $30,000 in one of the
other Liberty Funds with a sales load, and $20,000 in this Fund, the sales
load would be reduced."
September 30, 1994
[logo] FEDERATED SECURITIES CORP.
Distributors
461444200
G00671-03 (9/94)
AMERICAN LEADERS FUND, INC.
Class B Shares
Class C Shares
Fortress Shares
CAPITAL GROWTH FUND
(A Portfolio of Investment Series Funds, Inc.)
Class C Shares
Investment Shares
WORLD UTILITY FUND
(A Portfolio of World Investment Series, Inc.)
Fortress Shares
Supplement to Prospectuses dated July 31, 1994, December 31,
1993, and April 15, 1994, respectively
A.Please revise the last paragraph of the Summary of Fund
Expenses table on page one of the prospectuses to reflect
that Class A Shares of the Fund are subject to a maximum
sales load of 5.5%.
B. Please delete the first sentence of the
second paragraph of the section entitled" Other Classes of
Shares" on page 21 of the American Leaders Fund, Inc.
prospectuses, page 22 of Capital Growth Fund Class C Shares
prospectus, page 19 of Capital Growth Fund Investment
Shares prospectus, and page 25 of World Utility Fund
Fortress Shares prospectus, respectively, and insert the
following in its place:
"Class A Shares offered by the Fund are sold to customers of
financial institutions subject to a front-end sales load of
up to 5.50% ."
September 30, 1994
FEDERATED SECURITIES CORP.
Distributor
A subsidiary of Federated
Investors
Federated Investors Tower
Pittsburgh, PA 15222-3779
027128404
027128206
027128305
461444408
461444101
981487200
G00671-02 (9/94)
